US Worker Productivity Drops Again in 2nd Quarter

FILE - Cook Bulmaro Sosa, right, goes over a food order with server Zachary DeYoung at an Ivar's restaurant in Seattle.

Share

US Worker Productivity Drops Again in 2nd Quarter

share

The productivity of American workers fell in the second quarter, continuing a 12-month decline that fuels concerns about corporate profits and the ability of businesses to maintain their recent brisk hiring pace.

The U.S. Department of Labor said Tuesday productivity dropped at an annual rate of 0.5 percent in the three-month period through June.

The past 12 months have seen 0.4 percent drop in productivity, as rising labor costs and the number of hours worked are outpacing workers' output of goods and services.

Strong job gains help boost worker productivity, which contributes to higher incomes and rising living standards.

Uncertainties stemming from fragile global economic growth and the U.S. presidential election could affect wage hikes for U.S. workers as companies grapple with potentially weaker profits.

But the U.S. employment picture has been solid, with the Labor Department reporting the addition of 255,000 jobs in July and 292,000 in June. Last week it reported the jobless rate was a healthy 4.9 percent.

Some economists believe the drop in productivity, which measures hourly output per worker, is due to a shift from manufacturing and energy jobs to jobs in the service industry. Other economists question the government's ability to accurately measure it.